September, 2017
Home / Banked sick day policies put Metro Vancouver taxpayers on hook for $90 million

Banked sick day policies put Metro Vancouver taxpayers on hook for $90 million

THE practice of allowing government employees to “bank” sick days has created a liability of $90 million for 17 municipal governments in the Metro Vancouver region, according to the latest research from the Canadian Federation of Independent Business (CFIB).

Banking means that if an employee doesn’t use all their allotted sick days in a year, they can save them to be used, and in some cases paid out, later. For example, in both Richmond and Vancouver, employees get 20 paid sick days per year and can bank up to 261. In addition, they can bank up to an additional 120 “gratuity” days which can be cashed out when leaving the public service (after minimum two or three years’ service, respectively.)

The result is municipal governments are accumulating massive liabilities. In Vancouver, the liability in 2014 for its sick day bank was nearly $36 million while in Richmond taxpayers are on the hook for a liability of about $17 million.

“Obviously, it makes sense for governments to have a safety net in place for cases where employees fall ill in the short-term,” said Richard Truscott, Vice President for BC and Alberta. “Unfortunately, many of the policies in Metro Vancouver go far beyond this, allowing employees to bank hundreds of sick days, with some also providing cash or additional vacation days totally unrelated to illness.”

Fifteen of the 17 municipal government plans examined in Metro Vancouver allow for banking sick days, versus only three per cent of private sector plans. Burnaby and New Westminster are the two municipalities that have moved away from the practice, introducing affordable short-term disability plans. Unlike sick day banking policies which provide unequal benefits based on seniority, short-term disability plans offer equal benefits to all employees.

“It’s good to see at least a couple municipal governments have recognized banking sick day policies as ineffective, costly and unfair. These plans cost millions, resulting in an additional burden on business and residential taxpayers,” noted Truscott. “Many municipal governments in the region are currently negotiating new collective agreements with unions. It’s beyond time to remove sick day banking and introduce affordable short-term disability plans to better align sick leave provisions with those in the private sector.”